i wish i had a fix, but i can only say that i have the same exact problem..
i have an hp pavilion ze4600 .. 3.2 and 3.3 work great, even on hd...

if i boot in failsafe and let it sit, it will eventually bring up the full splash and the kde dialog, but it freezes and disables all buttons - even my cdrom eject.
i had to take the battery out to get it to stop - ouch..

i've checked the checksum of my iso and it's fine. suppose this is a bug.. i've just read that there are "a couple of new steps" concerning the hw-detection ( ironically this is why i wanted 3.4 so much, for a wireless card..)

please post any fix!!! thanks.